Our stock room is literally OVERFLOWING at work.... too much product coming in no one is buying

[TwixVoy]

Just got a call from our logistics manager at work warning me what a mess I was walking in to tomorrow.

For the past week our stock room has been literally stuffed so full with product there is no longer any room on shelves or the steel to stock it. The sales floor is 100% full. There is no place for it to go. So the backroom is LITERALLY so full of product we are having to stack it on the floor, and it is now no longer possible to even physically get to some places in the stock room because a mountain of boxes is in the path. In my years at this store I have never ever seen anything like this happen before.

Apparently the distribution center pushed us ANOTHER truck full of toys and other product. The distribution centers know we don't need the product, but the company has it and has to get rid of it so the DC has to push it to the stores to get rid of it.

Apparently corporate sent down a message today instructing stores to activate clearance prices IMMEDIATELY on tons of this crap. This is a major surprise because the original plan was NOT to activate clearance prices until after christmas. There is so much product that has to go clearance our price change teams are going to be working overnight to ticket this stuff.

But this is really freaking me out. The system is literally jamming up. The distribution centers have more product going in to them than they can store, so they are pushing it to the stores, and the stores aren't selling it so it is literally getting piled up and sitting in the store backrooms. It is like a septic system backing up.

Hopefully the clearance prices will start to get this stuff to move out the door, but the bad thing is once these clerance prices get activated that means less profit and even taking a loss on this product depending on how far we have to mark it down. This is a very concerning instruction that corporate has given us because it means that sales are NOT AT ALL going according to plan.

Too much plastic junk that no one sees a need to get in to debt for anymore it looks like. I am afraid to see how the market reacts when earnings numbers for this quarter get reported.

[EC]

1. So what store is this that is going to have a clearance sale

starting this week?

[TwixVoy]

11. It won't be all tomorrow

or all of anything for that matter. The price changes are going to be staggered out, but it is going to be rapidly implemented. Within a week most of the toys department, for instance, will be clearance priced.

[SidDithers]

2. And I can't find a Guess Who Extra for my kids...

anywhere in the Toronto area :)

Hope things pick up for you.

Sid

[TwixVoy]

4. You also can't find a nintendo Wii or Wii Fit anywhere

that doesn't change the fact 99% of the rest of the product we have on hand isn't moving.

You really can't even grasp how consumer demand has dropped unless you see it every day. Hell, when our stock room started backing up over a week ago I didn't even realize what was happening until days later when I walked in to it and said "Hmmm... I need to get this stuff out to the floor...." and realized the floor was 100% full already.

And honestly this backup of product has created such a mess even if we HAD gotten more Guess Whos in we wouldn't be able to find them in the mountain of boxes all over the place anymore to get them to the floor.

[notadmblnd]

42. I know this is off topic. But why would anyone want a Wii fit?

Wouldn't standing in a mirror while exercise have the same results and be much cheaper? I'm not making fun of anyone who wants one. I just don't get what the purpose of it is and what it does that can't be done in a mirror?

[Lex]

48. You get instant feedback from the wii on what you're doing

and not so much from the mirror, unless it's a magic mirror.

Kind of like the difference between playing a nintendo game on tv isn't the same as standing there looking at a tv screen.

[Ignis]

53. It also takes all the boring tracking/process work out of fitness.

There's no need to keep an exercise diary when the magic white box does it for you. :)

[old mark]

44. My wife was looking at a Wii two weeks ago. The sales guy said there was a truck full

that had just backed up to the dock, and they would be gone as soon as they could be unloaded - wouldn't last 2 days.

Even at a local Dollar store,people are spending very carefully, buying almost nothing on impulse, and nothing extra.

I already have my Christmas and New Years dinners planned and have bought most of the stuff needed for them last month. All out Christmas gifts are bought, and the only extra thing we bought this year was one roll of wrapping paper.

mark

[proud patriot]

56. I bought those at the begining of November

Thank Goodness.

I told my family we may not be opening presents
on Christmas Day but We'll be playing our wii
and wii fit . We finally got a third remote so
we all bowl at the same time.

It's so fun .

[Warpy]

3. Yes, and corporate's response to the crap not moving

out of the store fast enough will be to lay people off and contribute to the basic problem of too few customers with enough money to buy the crap.

I was afraid depression psychology would take over and it seems that it has. Even people with the money to buy that crap aren't buying it because they don't know how long their own jobs will be there.

I keep telling people that until the fundamentals of this economy are repaired, meaning the working stiff gets paid enough that he turns back into a customer, the market is going to go nowhere but down.

[nadinbrzezinski]

9. We are entering into deflationary territory

and some people may applaud that in the beginning... but it is actually worst than inflation

[Laelth]

36. Oh, yes. Deflation is much worse.

Everyone stops buying when they know that the goods they want will be cheaper tomorrow ... or next year. Deflation causes the entire economy to grind to a halt. A working economic system needs constant, low inflation.

The United States is a LIBERAL Country.

:dem:

-Laelth

[lpbk2713]

5. Are local mgrs at liberty to put whatever items on clearance that they choose?

And can they set whatever price they want?

Sounds like some good bargains can be had if so.

[TwixVoy]

8. No

not at all. We receive the price changes electronically from corporate, and that enables us to use those prices. We then have to activate them on the PDAs, and our price change team goes around and changes signs, labels, and tickets as necessary. The major change is we weren't going to have these prices in the system activate until after christmas, now we are being told the prices are being sent down and to activate them immediately.

[Mind_your_head]

6. Working "stiffs" are turning back into "citizens"

aka, "We've had enough of this sh*t and we're not gonna 'take it' anymore!

[nadinbrzezinski]

7. To those worrying about hyperinflation, what Twix is describing is exactly the

kind of deflationary pressures of the 1930s

And yes, I'd start worrying

A month or two of that crap (deflation), no problem, more than that... it is incredibly damaging

[Mind_your_head]

25. I'm not going to worry, Worrying is not productive, n/t

[girl gone mad]

32. It's actually not that bad..

except for those carrying too much debt.

[truedelphi]

35. Other indications that 1933 is upon us:

Six weeks ago, 23 states were on edge about their deficit budgets. Today, California, a state with 32 million people, says that it will run out of Money in March of 2009.

Food pantries cannot keep up with demand.

Cut backs for many government jobs - teachers, firemen, police, etc.
More jobs lost every day.

[nadinbrzezinski]

59. Yep...states running out of money

not good

[Nikki Stone1]

47. You're on the money, Nadin.

Scary times.

[Blackhatjack]

10. It would be helpful to know the name of the store, or give us 3 names with it being one of the 3...

It's hard to gauge the anecdotal aspect of the post without knowing the retail sector we are talking about.

If it is one of Walmart/Target/Kmart then we can gauge the market impact.

IF it is a local chain outlet, the conclusion we draw would be markedly different.

[TwixVoy]

12. I won't name my store because I enjoy keeping my job for the time being

but I will say it's one of the 3 you named.

[Blackhatjack]

18. I can certainly understand your position... thanks for taking the time to post your observations...

I keep hearing people say we are in the worst of the recession right now.

I don't think so... people are basing that idea on what has happened in the last 25 years.

THis is very different.

The deteriorating supply/demand situation you are describing here has unavoidable consequences, which will not be corrected without a lot of pain on both sides of the ledger(seller/consumer).

Inflation can be deadly as dollars chase rising prices for necessaries.

But deflation can be worse. It means that people have no money to spend and goods are unsaleable for anything close to the price of production. It kills off future production and leads to further job losses, which in turn further depresses consumer demand.

Factories and merchants will downsize and close.

This could be another Japan deflation crisis that could take a dozen years to overcome unless there is some quick action by those with the financial means to make a difference act immediately for the greater good of the country.

[CoffeeCat]

20. I don't understand how anyone can say...

...that this is the "worst" of the recession.

If anything--consumer spending is very high, compared to what it was last month and especially
considering what it will be in January.

January sales are always down. People tighten their belts after spending so much during the holidays.
My father owned stores in malls, and ever year we all understood that Jan/Feb sales were the lowest
of the year.

If inventories are piling up NOW--holy buckets. That is a very ominous sign. If inventory isn't
moving during a time when people are most likely spending the most they will--for a long time, we're
in for a bumpy ride.

I know that our family has drastically reduced spending. Starting in September we went cold turkey.
We went into hyper-savings mode. We knew that we would spend some (but not as much as past years)
for the kids at Christmas. However, we both know that after the holiday--we're back to reduced spending
on everything. Given that the economy has only worsened during the holiday season, and unemployment
has been rising--I bet consumers go into spending cocoons.

I hate to be such a pessimist, but I just don't see how we avoid a massive economic event that rivals
The Depression.

[Chisox08]

54. From your story I thought you worked for Toys R US

The last time I was there a few of me former co-workers told me how the product is piling up in the storeroom. At first I didn't believe them until they showed me the storeroom. They also said they have 3 more trucks coming this week.

[eowyn_of_rohan]

40. I think all of them are having this problem. We have a local chain in Wisconsin

Shopko- like the 3 you mentioned - I was in there yesterday and from what I saw I imagine they have the exact same problem as the OP'er describes. Not a soul was shopping in the women's dept when I walked by. Countless racks of clothing - some looked like nice, stylish stuff, too (for a discount store!) - with "Clearance" signs on the tops of the racks. 50-80% off signs... There were maybe 30-40 people in the store from what I could tell, and it is 2 weeks from Christmas. I am not a big shopper, and haven't been in any discount or dept. stores in weeks. This was sad and stunning.

[Donnachaidh]

13. I went shopping this evening dreading the traffic and crammed parking lots

And was STUNNED when I drove past a Best Buy with *6* cars in the parking lot. And driving was perfect -- actually less traffic than normal.

I went into JoAnn's craft store and saw more people there than at Best Buys. And virtually everything was on sale. Evidently people are still crafting, and I'd dare say more people are looking to make things for Christmas. But the other stores had few cars and fewer shoppers.

This same time last year you couldn't get NEAR this particular strip mall. I almost drove to see how the parking was at the main mall, but didn't. If the strip mall has no one buying -- the main mall is probably having problems too.

[TwixVoy]

14. And the really worrying thing is

the company anticipated this and told us MONTHS ago we would be getting very light product shipments this december.... and these "light product shipments" are still more product than we can even get out the door.

[EC]

16. Last Friday I went to several stores...

the most packed and busiest?...St. Vincent DePaul and Goodwill. K-Mart was pretty empty, Pier One was like a library and Kohl's had very few people...I'm guessing resale shops and craft stores are doing very well...

[CoffeeCat]

19. We're going to see a retail bloodbath....

...that will snowball during Jan, Feb and March.

I think this country is going to be incredibly shocked at all of the retail
businesses that will go under.

I wonder how restaurant chains are doing. If people aren't shopping, they
certainly aren't eating at restaurants. I wonder how the chain restaurants--Chili's,
Applebees, Outback, etc are doing?

[Donnachaidh]

22. we have a Joe's Crab Shack in the area I drove past

A year ago it was SRO to get in, forget finding a parking space.

Now? Hell, if any of the cars in the parking lot this evening was for customers instead of staff - you couldn't tell. It was virtually empty.

THAT surprised me.

[Systematic Chaos]

30. I experienced Joe's Crab Shack one time, and this was back in 1999 or 2000.

That one time was enough to ensure that I'd never go back.

I basically spent over $40 on a snack for two. HUGE frickin' ripoff. I'm not surprised they've lost a lot of their customer base.

[Kalyke]

57. Heck, people stopped staying for drinks at Tennessee restaurants

as soon as they passed the no smoking law.

People can still smoke at clubs that are 21 and above, so people get their meal and leave to head out someplace where they can smoke. It's been horrid on local restaurants who rely on the after-dinner drink purchases to churn profit. Restaurants are dead after 7 or 8 p.m. here, now, but the clubs are packed.

Now, with the economy looming large, I'd say those who were hanging on to build outdoor beer gardens (where people can smoke) won't make it to the Spring when the fruits of their labor would have paid off (keeping the smokers at the restaurant for after-dinner drinks).

[CoffeeCat]

17. I also noticed this at Michael's...

I don't know if everyone is familiar with Michaels, but they are a big hobby/craft/art store.

I was shopping there this week, and they had most of their stuff on sale. There were 50% and 75% off signs
everywhere. More than 2/3 of the store was marked down at least half off.

Also, when you check out--they automatically give you a coupon that comes out with your receipt--for
40 percent off your next purchase. Every transaction produces one of these coupons.

I got the distinct impression that Michaels was trying to get rid of inventory.

[Donnachaidh]

24. we have a Michael's here too.

They seemed to be getting rid of inventory and shrinking last summer. I haven't been back since, but I'll bet they have sales out the wazoo.

[yowzayowzayowza]

21. Noticed that here too.

The craft store parking lot was almost full. The rest of the retail strip looks pretty sparse.

[eowyn_of_rohan]

38. Same for me yesterday - and on a "doorbuster" sale day...

Penneys was DEAD. I was all alone in the bedding and housewares dept.s. With the Christmas music playing and a handful of people in the entire store, I had an eerie feeling - imagining myself in the future, reminiscing about the old days, when there used to be big department stores with escalators and towering holiday displays... there is a sadness in the air these days...

[CoffeeCat]

15. Can I ask where you work?

If you feel comfortable letting us know where you work, I'm interested.

When the big-box retailers start suffering like this--especially during the holidays--it's so telling!

I was in Walmart tonight, and I've never seen it so dead. It was eerie! Two weeks before Christmas
and there was no one in the store. I also noticed a lot of mark-downs in the produce and frozen food
sections. Product with shorter shelf life is not selling, and they're marking it down. The other day,
I found big containers of Breyers ice cream for 65 cents. Tonight, I got 60 cent Quaker granola bars
(but I used coupons too).

I also ordered some toys tonight from Amazon.com I couldn't believe the prices! I got Hannah Montana dolls
for $5. They retailed for $19 at Walmart. I also got a couple of Hasbro games for $4, that were around $15 at
Walmart. So many toys are discounted on Amazon right now...many at 70 percent off. They also have free shipping
orders of $25 or >.

Here's a link if anyone needs to purchase toys for kids:
http://www.amazon.com/Toys-Holiday-Event/b/ref=amb_link_7849982_2?ie=UTF8&node=360960011&pf_rd_m=ATVPDKIKX0DER&pf_rd_s=hero-quick-promo&pf_rd_r=0065NT8GV0R2CNWBNZNG&pf_rd_t=201&pf_rd_p=465502671&pf_rd_i=B0017T3IG6

[Pirate Smile]

46. Check comments 10 and 12 - it is either Walmart, Target or KMart.

[tpsbmam]

52. I went to Target the other day just for a few things and my prescriptions

and I was surprised at how empty it was. I mean, there were people shopping but being so close to Christmas I was anticipating a nightmare (and an inability to get an electric cart -- with my current disability, NO WAY can I walk Target) -- all of their electric carts were free. There were no lines at the checkout counters and when I was leaving I noted that some checkers were standing there idle. It was a weekday (I don't shop on weekends if I can possibly help it) but still......I drove past the Super Walmart parking lot and it was packed. (I don't shop at the 3 K-Marts here -- they suck.)

[Blackhatjack]

23. Here is my opinion of the implosion that is going on right now....

Banks/Lenders went to Congress and got their draws from the public treasury for the stated reason that 'credit lines are frozen' and they could not make loans to businesses without bailouts. However, it was never about making loans to the businesses --it was about shoring up their own balance sheets once the massive losses became known which they previously kept off the books.

Once the losses became known, and hedge funds had to be closed with their best customers taking huge losses, they were done. So the application of the bailout was a ruse --they never intended to make the loans they told Congress they would make with the bailout money.

All you have to do is look around to see that spending is down... way down .... and retail businesses are taking the brunt of the downturn. Niche restaurants above the level of McDonalds are in big trouble ... and they know it. They are advertising low priced entrees to try and generate traffic with little success.

Retail stores are product large and sales small ... with absolutely no time to turn things around. Those hoping for last minute sales to save them are dead. If you haven't already committed to post Christmas clearance pricing you are bound to be sitting on a mountain of merchandise after Dec 25th with little hope of selling at all. With no sales profits generated pre-Dec 25 there won't be any funds to make seasonal shopping purchases for the Spring season.

Grocery stores are in serious trouble. Some items have gone up 50-100% in price over the last 2 months, while others are simply unavailable. Sales items are driving much of the purchasing, and high end luxury items are not moving. The high volume Walmart/Target food business is helping to kill off the remaining dedicated grocery stores.

Car sales have totally disappeared. Cars are sitting by the hundreds on the docks, not being shipping to dealers, and there are ships with imported cars sitting offshore unable to unload because of the cars sitting on the docks.

I hate to say it... but the only two things that will matter soon are CASH and NECESSARIES(ie. food, gas, etc.). Anything else you will have a hard time giving away ....

[Blackhatjack]

26. Another observation... there is a sales flyer in the paper almost every day from clothing stores...

JC Penney, Kohls, Macys, etc.

JC Penney just sent us a $10 OFF coupon on a purchase of $10 or more.

They are desperate to drive store traffic, and the few times I have been in one of their stores I noticed few customers making purchases even with all the huge markdowns.

If you are trying to sell clothing in this market, you may be out of business by Feb....

[leftstreet]

28. Sounds about right

Banks/Lenders went to Congress and got their draws from the public treasury for the stated reason that 'credit lines are frozen' and they could not make loans to businesses without bailouts. However, it was never about making loans to the businesses --it was about shoring up their own balance sheets once the massive losses became known which they previously kept off the books.

My bold.

[xchrom]

27. really? -- where do you work? nt

[Systematic Chaos]

29. Too bad you don't have a cell phone camera...

... and the ability to take pictures in that back room without having to fear the loss of your job.

I've been following your posts for a while now, and there's not a horror story out there as frightening as reading your posts for the last few months in chronological order.

Thanks for the info, and stay safe! :hi:

[CoffeeCat]

41. I agree...

...the OP is in the trenches.

It often takes just one example, from someone 'on the inside" to illustrate the
reality that we all know is happening.

We "feel" it, when we go in these stores and see very few shoppers and a stillness
in the aisles.

I was in Target the other night, and everything looked so pristine and untouched. The
shelves were brimming with product. It reminded me of a movie set!

The only thing missing was the shoppers.

[SammyWinstonJack]

31. Who do you work for? You have never been willing to say.

[Systematic Chaos]

33. But he HAS said on multiple occasions that he'd rather keep his job.

:think:

[SammyWinstonJack]

34. Cool!

:think:

[Cessna Invesco Palin]

37. This seems to be the case all over.

My former employer (the one who just laid me off due to the economic crisis) was having problems that could basically be summed up as, "The retailers we have left who aren't bankrupt aren't buying anything from anybody. Those few who are buying can't get credit insurance, so we won't sell to them."

It seems like the problem started in retail due to a combination of lower consumer spending and problems obtaining credit. It's now worked its way back into the manufacturers, and seems to be moving from the manufacturers to the suppliers (one of the biggest manufacturers of RAM chips in S. Korea just laid off tons of people.) My guess is that the next to be hit will be transportation/logistics - shipping companies and the like.

[Blackhatjack]

43. The last public report out of FedEx seems to confirm your observation....

I would imagine that this year will be the year of online purchases with all the 'free shipping' being offered by desperate merchants.

However, those shipping costs are going to be dropping off the radar because they are unsustainable for merchants to make a profit.

And when it comes to restocking product, there is no need for shipping when there is a backlog already in the stores.

I think the coming 'sales' after Christmas will be closer to 'fire sales' than just larger discounts.

[Cessna Invesco Palin]

50. Online merchants tend to have lower fixed costs than brick&mortar merchants.

The combined forces of Wal-Mart and online retail have been hurting mid-sized brick&mortar retailers for years now. This may be the final nail in the coffin.

[dixiegrrrrl]

58. "transportation/logistics - shipping companies and the like."

already hit. That's the problem.
This is really really scary.

The Baltic Dry Index follows shipping ( as in boats) trends, prices.
Shipping depends on available credit.
Closed credit means NO shipping transport.
All sorts of "stuff" has been piling up on docks, both imports and exports.

1.http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=47686

2.http://www.forbes.com/2008/11/20/dryships-economou-shipping-markets-equity-cx_ra_1118markets45.html?partner=yahootix

[Cessna Invesco Palin]

62. I remember seeing that a while back.

I see two separate (but intertwined) problems here. The first is the credit issue. The second is the goods surplus, which remains a problem regardless of the state of the credit markets. It's just bad all over.

[JVS]

39. Wow. No demand. Need a bailout?

[MedleyMisty]

45. I work for a rental management company

And our list of vacancies keeps growing, as does our list of court cases and evictions and denied applications.

[rvablue]

51. I'm curious, because of the current climate, do you find that applications

that aren't "perfect" or "less than perfect" that your company might have still have considered a year or so ago are NOW getting denied.

I find all of this firsthand, anecdotal information so helpful for getting a full picture of what is coming down the pike.

I don't think the MSM is letting us know everything that would should.

[Nikki Stone1]

49. TwixVoy, your info has been valuable all along.

Keep posting what you see.

[earth mom]

55. To be honest I haven't seen the kind of deals that were hyped the past few months

by the media or that we've all been lead to believe that would be out there given the "dire" state of the economy.

I'm sure loads of people are feeling the same sort of sticker shock, so I'm not surprised that people aren't buying and are waiting to see some REAL blow out kind of sales.

Sorry, but what did retailers expect when the bad economy has been hyped 24/7 since the billion-no trillion-dollar bailout?

And what did retailers expect when people are losing their jobs by the thousands all over the country?

Oh and one more thing. If things are so damn bad, why aren't the prices coming down on Wii video games? $40 to $50 bucks is a small fortune for a gawd damn game!

Greed has done this entire country in and that applies to retailers like Walmart and Target who buy shit for pennies on the dollar in China for a 1000% markup while they pay their employees minimum wage that they can't even afford to live on!

:rant:

[nadinbrzezinski]

60. I got some needed clothes on Black Friday

for less than 20

I paid for those items what was full retail 25 years ago

So yes, they are out there and companies are desperate since not even at those prices was the place even slightly crowded.

[dixiegrrrrl]

61. 54 replies and 14 recs?

In-the-trenches details like Twix Voy's, and other's on this thread, is important.
anyone wanna add to the recs, to share the information?

[MazeRat7]

63. Wanna be a hero ? Float the idea they need to better manage their supply chain...

If they are keeping more than a couple of weeks ( I prefer days) of inventory, they have a problem.

I know, not your gig. But there are team meetings and the like. Just ask the question next time you get a chance.

The question:
"What are we doing to better manage our supply chain to keep our inventory at a level that more accurately reflects what consumers are buying ?"

Better supply-chain management = lower cost of operation = more profits for the company = working employees w/benefits = a less stressed workplace and job security.

Just my esoteric $.02

Peace,
MZr7